Somebody call the whaaambulance for Macquarie:
Macquarie Group says the government’s controversial bank levy will have an “unintended and disproportionate” impact on its local lending operations, potentially hitting the Australian banking division’s earnings by 11 per cent.
The Sydney based financial institution broke its month-long silence on the controversial tax after the AFR Weekend revealed on Friday it was considering relocating its headquarters to Singapore
In a statement issued late on Friday, Macquarie said the tax could increase the banking division’s Australian tax rate from 34 per cent to 41 per cent, and could hit the global banks’ earnings by 4 per cent, although it said the impact of the levy was “still unclear”
“The scale of Macquarie Bank Limited’s international and wholesale businesses means the levy may have unintended and disproportionate consequences on its local earnings,” it said.
Come now. We all know that MQG was the greatest single beneficiary of tax-payer support during the GFC. It’s business model was in deep strife as its heavily indebted ponzi-like satellites fell under righteous short-selling attack and the “mini-Macquarie” in Babcock and Brown collapsed. Deposit and wholesale debt guarantees plus short-selling bans saved its bacon.
It has ever since benefited from a free implicit guarantee to its wholesale borrowing, which it has used extensively to arbitrage all sorts of effectively taxpayer guaranteed global schlock at very high profit. It hasn’t paid a dime for the deposit guarantee either. And it still has access to the RBA cash for coconuts facility to boot.
If it wants to walk away from all of that fabulous largesse then let it, I say. We’ll just remove it permanently from the wholesale guarantee, as well as extend the bank levy to foreign banks to pay for the deposit guarantee (hence making MQG pay anyway) plus double the levy for the wholesale guarantee still covering the big four.
I put it to you, MQG, that you won’t find a bigger patsy anywhere than the Australian tax-payer and if I were you I’d shut up and keep creamin’ it. Your whining is only giving future governments more ammunition to properly price current freebies, and it is also jeopardising your big four friends.
As the great Australian adjustment proceeds, you’re going to need your good mate the Aussie tax-payer.
